Running on Empty

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Thousands cheered in L.A.’s newly opened Dodger Stadium as Sandy Koufax struck out one Yankee after another, leading the boys in blue to victory in the 1963 World Series.


And lording over them on the top of the scoreboard was the distinctive orange and blue Union 76 sign, the only advertising allowed in the stadium when it opened the prior year.


It was a reminder of Union Oil Co. of California’s local prominence, as if anyone needed one. Outside was a Union 76 filling station, and if fans missed filling up in the parking lot, there were dozens of other stations with distinctive orange and blue signs that they would surely pass on the way home.


“The ’50s and ’60s were high times for 76,” said Mike Nelson, a former company geologist and now director of the California Oil Museum, housed in Unocal’s original 1890 headquarters in Santa Paula. “They were definitely in the big leagues.”


How times have changed. Union, now El Segundo-based Unocal Corp., is the subject of a bidding war between China National Offshore Oil Corp. Ltd. and Chevron Corp. that has generated debate over the wisdom of allowing a Chinese government-controlled business to own a U.S. energy company. But deal or no deal, Unocal is a mere shadow of itself.


While it was never one of the industry’s largest players, the Los Angeles company dominated gasoline retailing on the West Coast, with 4,000 filling stations from San Diego to Seattle. But a decade ago, Tosco Corp.


purchased more than two-thirds of those stations and not long after that Unocal’s California oil fields were purchased by Torch Energy Advisors Inc. for $500 million.


At that point Unocal essentially became an exploration company, with nearly all of its activity overseas. “That was the beginning of the end,” said Fadel Gheit, senior energy analyst at Oppenheimmer & Co. “It’s almost like a very faded image of what it once was.”



History


The company, which was founded in Santa Paula in 1890 by Lyman Stewart, Sen. Thomas Bard and Wallace Hardison, hit the jackpot when its well in Taft, Calif., started spewing oil in 1910, the state’s first major gusher. That made Union the No. 3 oil company in California. Growth took off during World War I, when demand for fuel oil to power naval vessels skyrocketed.


Union got into the gas station business in 1917 and as the state’s growth exploded in the post-World War II years, there seemed to be a station on nearly every block. In 1965, Union merged with Pure Oil Co. of Illinois and expanded into 37 states.


Its influence extended beyond energy. Dodger Stadium was completed in 1962 with financing from Union, as well as Union’s chief executive at the time, Reese Taylor, a close friend of Dodgers owner Walter O’Malley, who brought the Dodgers here from Brooklyn.


Above all, Union was a gasoline producer and retailer and not above marketing gimmicks. During the 1950s and 1960s it had its Sparkle Corps, a group of women dressed like flight attendants who traveled from station to station and monitored the cleanliness of the rest rooms.


The stations also became known for the Minutemen who would wash customers’ windows and inflate their tires while their cars were being fueled up. These touches enabled Union to keep pace with its larger competitors, assisted by the steady oil prices of the time.


When oil prices rose sharply in the 1970s after the Arab oil embargo, the company still maintained its full-service model even after competitors dropped theirs as margins were squeezed.


But in 1985, Union did not fare so well after being targeted by corporate raider T. Boone Pickens. Chairman and Chief Executive Fred Hartley thwarted the takeover by accumulating so much debt that it became unattractive to acquire. But it came at great personal cost. Hartley died days after his retirement. “It was the end of him,” said Nick Curry, a researcher at the Huntington Library, who wrote a family history of the Lyman Stewart family.


The Pickens showdown also came as the company began shifting its business model to overseas exploration as domestic fields were slowing down. By the 1990s, Unocal’s debt had ballooned to $6.1 billion, and the company sold off assets and shut down activities not related to overseas exploration and production. That culminated in the sale of its service stations and California fields.


Now, facing an acquisition by either Chevron or CNOOC, its days as an L.A. company are surely numbered. “There’s no question in my mind, either way, it will be the end of it,” Gheit said. “Chevron dismantled Texaco and took the name away, so why should they treat Unocal any differently?”

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